The complicated, multi-part decision upheld most of the law, including a requirement that most Americans have health insurance or pay a penalty. But, it also said that the federal government could not require states to expand Medicaid to cover more of the poor or risk losing all federal funding for the health program.

Over decades, and especially since the 1930s, the United States has developed a model of “cooperative federalism,” in which the federal government pushes states to adopt certain programs and standards by using money -- sometimes called grants-in-aid -- as leverage.

Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito wanted to throw the entire law out. On the Medicaid expansion, they acknowledged in their dissenting opinion that the court has said the federal government can make grants with conditions attached. But, they write, if that power were left unchecked it would become a “grave threat” to the structure of government under the Constitution.

Congress created a back-up plan in case states refused to create virtual insurance marketplaces in which individuals and small businesses could buy plans. But they didn’t account for states refusing the Medicaid expansion because, the dissenters say, lawmakers knew refusing the deal “was not a practical option” for states. They write:

Whether federal spending legislation crosses the line from enticement to coercion is often difficult to determine, and courts should not conclude that legislation is unconstitutional on this ground unless the coercive nature of an offer is unmistakably clear. In this case, however, there can be no doubt. In structuring the ACA, Congress unambiguously signaled its belief that every State would have no real choice but to go along with the Medicaid Expansion. If the anticoercion rule does not apply in this case, then there is no such rule.

The fact that the four dissenters, did not define when -- with how much money at stake or in what context -- coercion becomes a factor is problematic, Parmet said.

Congress has expanded Medicaid multiple times, requiring new categories of people to be covered. Each time the threat of losing federal funding has been used as leverage for compliance. The dissenters’ reasoning opens the door for opponents of the program to challenge those expansions on constitutional grounds, Parmet said. And beyond that, the federal government has used grants as leverage to set national standards in education, unemployment policies, transportation, and even civil rights, she said.

Chief Justice John Roberts was joined by justices Elena Kagan and Stephen Breyer in writing that the Medicaid expansion was threatening to states. But he “took pains,” Parmet said, to distinguish this expansion from past ones. He writes:

Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level. It is no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage.

Indeed, the manner in which the expansion is structured indicates that while Congress may have styled the expansion a mere alteration of existing Medicaid, it recognized it was enlisting the States in a new health care program.

On the idea that the government’s requirement that states comply in order to get Medicaid money is overly coercive, former governor and Northeastern professor Michael Dukakis, said, “this is truly weird.”

“I don’t know where it’s going,” he said. “Does this mean that every federal new grant-in-aid program -- not to mention the existing ones -- is going to be subject to constitutional challenge? We’ve got an awful lot of grant-in-aid programs, highly conditioned on a whole series of things that states appropriately have to do to qualify for that money.”

“We’re looking at litigation and challenges that are going to on and on and on, which may employ you guys,” Dukakis told an auditorium full of law students. “But it will make it very confusing for those of us who have just assumed for a long, long time that the federal government had a major role to play in what goes on in this country.”

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